New accounting rules may require that acquirers and acquiring companies report earnout agreements as liabilities. Joel Johnson, president of Orchard Partners Inc., in his article, “Earnouts,” published by Valuation Strategies, states: “In a given year, 2% – 3% of announced…
The following are situations where the price was not the deciding issue in the successful sell of a business. The ultimate buyer may be the only one who really understands the situation. A business intermediary really understands the issues and…
Basically, there are three major negotiation methods. 1. Take it or leave it. A buyer makes an offer or a seller makes a counter-offer – both sides can let the “chips fall where they may.” 2. Split the difference. The buyer and…
Due diligence is generally considered an activity that takes place as part of the selling process. It might be wise to take a look at the business from a buyer’s perspective in performing due diligence as part of an annual…
A solid, factual and compelling offering memorandum maximizes the chances of not only selling a business, but obtaining the highest possible price. An offering memorandum is also referred to as the selling memorandum, a confidential descriptive memorandum, or simply as…
Important questions to ask when looking at a business…or preparing to have your business looked at by prospective buyers. • What’s for sale? What’s not for sale? Does it include real estate? Are some of the machines leased instead of owned?…